Trend of Rural Employment and Wages in Pakistan

Trends in rural employment and wages are important in a number of ways. For example, a steady growth of job opportunities is a precondition for productive employment of labour force under rapid growth of population. Rising real wages of the working class would be essential for incessant improvements ih the standard of living of the masses. Lack of sufficient employment opportunities in rural areas together with the consequent stagnating (even declining) wages may be a potential cause of mass movement of rural labour to urban areas and attendant formidable economy-wide problems. Similarly, aggregate growth rates of employment and wages in contrast with those in productive sectors have an important bearing on trends in income distribution and poverty. Rapid growth of population, predominance of rural sector and a general lack of studies on rural labour market conditions in less developed countries, including Pakistan, call for a study such as the present one, which explores the trends of rural employment and wages in Pakistan. The paper carries four sections. Section 1 surveys the present state of the rural labour market. Section 2 reports trends in rural employment and discusses the various factors underlying those trends. Employment situation being the basic determinant, wage trends, especially those in agriculture, are highlighted in Section 3. Section 4 summarises the findings of the study and in their light makes some policy recommendations.